PostalGamer Startup Could Revolutionize Used Game Sales — If It Works

Ubisoft's Driver: San Francisco will require a one-time-use pass for online play, discouraging gamers from buying it used.Image courtesy Ubisoft

A new online videogame store will give publishers a percentage of sales on used games, a move that could drastically change the way gamemakers look at the $2 billion market for secondhand products — assuming they’re willing to sign on.

PostalGamer.com, scheduled to launch this fall, will let gamers buy used games and trade in old ones by shipping them to the site’s warehouse in prepaid envelopes, not unlike Netflix or GameFly. In exchange for stuffing PostalGamer’s envelopes into packaging for new games, participating publishers will receive a 10 percent cut of sales generated by their titles from their catalogs.

Co-founder Mike Kennedy says PostalGamer will not only help out publishers, it will offer better rates than more prominent used game dealers like GameStop. While GameStop usually buys recently released games for $20 to $25 and sells them for $55, PostalGamer will likely buy them for around $35 and sell them for $50, Kennedy said in a phone interview with Wired.com.

In order to combat used game sales, which many publishers see as a threat to the industry, companies like Electronic Arts and Ubisoft have started announcing “online pass” programs — one-time-use codes for multiplayer or online gameplay. If customers buy games with used codes, they must dish out an additional $10 for online access.

By giving publishers a piece of the gargantuan secondhand pie, which NPD said last year hit the $2 billion range, a site like PostalGamer could change gamemakers’ attitudes, eliminate the need for online passes and potentially ease tensions between publishers and consumers.

‘Right now, gamers are kind of at war with publishers.’

“Right now, gamers are kind of at war with publishers,” Kennedy said. “It really shouldn’t be that way.”

Kennedy says no publishers have agreed to work with PostalGamer yet, though he’s had several fruitful conversations with the bigger ones. Wired.com asked several publishers to comment on the upcoming service, but none responded by press time.

However, some analysts said they are skeptical that publishers would be willing to give up the fight against used games.

“Do you think there is any situation where publishers would gladly accept $8 instead of $60?” asked Dubious Quality analyst Bill Harris in an e-mail to Wired.com. “If they endorse this idea, then they are endorsing used game sales. If game publishers admit there is a used game scenario that they would consider acceptable, then all their righteous indignation over used game sales would have to end, wouldn’t it?”

While Harris said he didn’t expect gamemakers to abandon their all-or-nothing position, “even when it seems reasonable to do so,” he remains curious to see if any publishers sign on to PostalGamer.

Kennedy says that whether or not publishers agree to work with his startup, he still plans to launch this fall. The website will “most likely” sell new games in addition to used ones, but will only deal in physical media.

“I hate to see the day when digital is your only option,” Kennedy said, lamenting the idea that one day people will no longer be able to borrow games from their friends or crack open the plastic wrap on boxes. He hopes that with a website like PostalGamer, which bears lower overhead costs than brick-and-mortar stores, physical media can continue to thrive.